Kelly Financial Group LLC

Item 5 – Fees and Compensation

                                     Fees For Financial Planning Services

The Kelly Group prefers to enter into long-term, holistic relationships with clients, in which its
financial planning services are part of its overall engagement for investment management services,
but we reserve the right to charge a separate fee for financial plans.

When clients elect to engage us for financial planning only, without also engaging us to provide
investment management services, the fees for the financial planning services are negotiated between
the firm and the client on a case-by-case basis. We reserve the right to waive or reduce the financial
planning fee, at our discretion. We also have an arrangement with a local financial institution pursuant
to which we will provide a limited financial plan without charge to clients referred by that institution.
The financial planning fee is charged on a fixed fee basis. 1 Generally, the flat fee ranges from $1,500
to $3,500 but, depending on complexity, can be as much as $10,000 or more. The fee is due when the
plan recommendations are delivered.

Should a contract be terminated prior to the service being delivered, The Kelly Group will bill for work
completed unless The Kelly Group determines, in its discretion, not to do so. In the case of
prepayment of fees, the prorated refund will be based upon the percentage of work completed.

1Somelegacy clients of The Kelly Group are charged on an hourly basis for financial planning services, but The Kelly
Group does not offer hourly fees to new clients.

                                  Fees For Investment Management

The fees for asset and investment management are based on Assets Under Management (“AUM”).
Fees are billed quarterly in advance and subject to a minimum quarterly fee of $550. The amount
billed quarterly is equal to the applicable annual percentage fee divided by the number of days in the
year, then multiplied by the number of days in the quarter.

Standard AUM Fee Schedule:

  Asset Tier                                            Annual Advisory Fee

  up to $100,000                                        1.50%

  $100,001 to $200,000                                  1.40%

  $200,001 to $300,000                                  1.30%

  $300,001 to $400,000                                  1.20%

  $400,001 to $500,000                                  1.10%

  $500,001 to $1,000,000                                1.00%

  $1,000,001 to $2,000,000                              0.95%

  $2,000,001 and over                                   0.50%

These are marginal rates. In addition, all assets belonging to the members of a household or family
(as identified by us in our discretion) are aggregated for purposes of the fee calculation. We then
calculate the effective fee rate for the entire household and/or family, and then charge that effective
fee rate to all family members. The following are examples of the effective fee rate, applying the fee
schedule above.

        Example 1: An account valued at $300,000 would pay an annual effective rate of 1.40%
        (calculated as 1.50% on the first $100,000, plus 1.40% on the second $100,000, plus 1.30%
        on the remaining $100,000).

        Example 2: A family whose total assets under our management are valued at $2,500,000
        would pay an annual effective rate of 0.94% (calculated as 1.50% on the first $100,000, plus
        1.40% on the next $100,000, plus 1.30% on the next $100,000, plus 1.20% on the next
        $100,000, plus 1.10% on the next $100,000, plus 1.0% on the next $500,000, plus 0.95% on
        the next $1,000,000 and 0.50% on the remaining $500,000).

The methodology for calculating the value of AUM for purposes of the fee calculation may be
different than the methodology used to calculate regulatory assets under management. Clients will

also incur custodial fees, transaction fees, and fund administration fees. Additional information on
brokerage and other transaction costs is set forth below and in Item 12.

The Kelly Group has established a separate fee schedule for Qualified Plans, which are charged
rates that depend on the total asset value of the Plan as well as the level of services required,
generally ranging from 0.95% for lower asset values to 0.25% for higher asset values. The Plan
Sponsors or Administrators who are interested in further information about The Kelly Group’s
services and fees should request a copy of The Kelly Group Qualified Plan Fee and Services
Schedule by calling 410.893.0560.

Similarly, The Kelly Group has established a separate fee schedule for management of annuities
and their investment sub-accounts, which are charged rates that depend on the market value of the
investments in the annuity; for annuities with market value of less than $1 million, the fee is 1.0%,
and for annuities with market value of $1 million or more, the fee is 0.50%. The Kelly Group has
other fee schedules for other services, such as for non-profits and estates. Prospective clients should
call to inquire about the fee for such services.

The Kelly Group reserves the right to charge more or less than the amount set forth in its standard
fee schedule, depending on the complexity of the engagement and other factors, in its sole
discretion.

The fee to be charged each client will be stipulated within each client’s advisory agreement with
The Kelly Group and applies to the assets within the portfolio or household (as defined in the
agreement). In some limited circumstances, some assets might be excluded from the fee calculation
or may be charged a lower fee; this might apply, for example, to certain cash holdings or specific
securities being held at the client’s request that aren’t monitored by The Kelly Group.

Although The Kelly Group generally does not recommend that clients use margin, if the client
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Item 7 – Types of Clients

The Kelly Group offers advisory services to the following types of clients individuals, high-net-
worth individuals and families, trusts and estates, foundations, charitable organizations and other
non-profit organizations, corporations and other business entities, and qualified plans.

As described in Item 5 above, we require a minimum fee for our services. We reserve the right to
decline services to any person or firm for any reason at our discretion. We also reserve the right to
waive minimum based upon client circumstances, such as a pre-existing relationship (e.g., family or
client), the ability to achieve a portfolio size that supports the minimum fee within a short period of
time, or other conditions.